Wall Street extends Fed-fuelled rally, Nasdaq hits new high

Big tech names, including Apple, Alphabet and Amazon, lead broad gains; S&P 500 gains 14.06 points to 2,177.18; Nasdaq addes 44.34 points to 5,339.52

Nasdaq hits record high. Photo: Bloomberg
Nasdaq hits record high. Photo: Bloomberg

New York: US stocks climbed on Thursday, with big tech names leading broad gains, building on strength from a day earlier that was fuelled by the US Federal Reserve’s decision to stand pat on interest rates.

The S&P 500 tallied its best two-day performance in more than two months, while the Nasdaq closed at a record high.

US Fed Chair Janet Yellen said on Wednesday that US growth was looking stronger and rate increases would be needed to keep the economy from overheating and fuelling high inflation. But the central bank maintained the low-interest rate environment that has helped underpin the bull market for stocks.

“Lower for longer is a good thing for the equity markets...” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “It basically says risk back on.”

The Dow Jones industrial average rose 98.76 points, or 0.54%, to 18,392.46, the S&P 500 gained 14.06 points, or 0.65%, to 2,177.18 and the Nasdaq Composite added 44.34 points, or 0.84%, to 5,339.52.

The three indexes recorded their third straight session of gains.

Concerns over whether the Fed would raise rates prompted a return of stock market volatility in recent weeks after two months of calm. For the year, the benchmark S&P 500 is up 6.5%.

Aside from the potential for Monday’s US presidential debate having a big impact on the election, “there’s really nothing on the horizon until earnings season, and the Fed has kind of cleared the way for accommodative policy and low interest rate environment which bodes well for stocks,” said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates in Toledo, Ohio.

The Fed strongly signalled it could still tighten monetary policy by year-end, and as of Thursday afternoon traders set the probability of a hike at the Fed’s December meeting at 58%, according to the CME Group’s FedWatch website.

Adding some support for the Fed to raise rates later this year, a report showed number of Americans filing for unemployment benefits unexpectedly fell last week to a two-month low.

All 11 major S&P sectors closed in positive territory, led by a 1.9% gain for the real estate sector.

Shares of Amazon.com Inc. rose 1.9% to close above $800 for the first time following a price target raise by BMO. Apple Inc. shares gained 0.9 percent after positive analyst reports. The stocks were the biggest positive influences on the S&P.

About 6.8 billion shares changed hands on US exchanges, in line with the daily average for the past 20 trading days, according to Thomson Reuters data.

NYSE advancing issues outnumbered decliners 4.84-to-1; on Nasdaq, a 2.54-to-1 ratio favoured advancers.

The S&P 500 posted 28 new 52-week highs and no new lows; the Nasdaq Composite recorded 165 new highs and 14 new lows. Reuters

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